THURSDAY, 25 JULY 2019
SUBJECT/S: Superannuation guarantee, Newstart
LAURA JAYES: Joining me now is Shadow Assistant Treasurer Stephen Jones, live from Canberra. Thanks so much for your time. I appreciate it. We hear from Andrew Bragg a suggestion, voluntary super for those earning under $50,000 a good idea?
STEPHEN JONES, SHADOW ASSISTANT TREASURER: He's wrong, of course. No, it's not a good idea. It's a direct threat to the retirement savings of millions of Australian workers on average wages of around $80,000 a year today. This would cost them about $90,000 in their retirement income. Devastating for the retirement savings of average workers, but also devastating for the Prime Minister. This is a direct challenge to the authority of the Prime Minister, to the authority of the Treasurer and the authority of the Finance Minister. The rebels are growing, there's 13 of them now that have publicly outed themselves. We know there's many, many more. This is Malcolm Turnbull all over again, where you've got policy being developed and then rolled by the backbench because of their ideological opposition to sensible propositions.
JAYES: Just on this suggestion of superannuation, you say it's a bad idea, but isn't it the case that someone earning under $50,000 would probably be relying on a part-pension or pension as well?
JONES: There's two problems with the assumption that Mr Bragg and others have put. They're trying to float this carrot around that says that somehow if this money doesn't go into superannuation that it's all going to go into your wages. Thats clearly not true. There is no way that the Commonwealth Government can say if we freeze the Superannuation Guarantee Levy then that move of to 0.5 percent per year between to 2021 and 2025 is going to flow through to wages. There's just no way that the Commonwealth can guarantee that and they won't.
JAYES: Aside from wages at the moment, the super scheme is costing government more in tax concessions than it saves in the aged pension. What is wrong with this suggestion for low income earners to have access to their money before they retire?
JONES: We have a retirement savings system, which is held up around the world as one of the most successful models. We have over a very short period of time transformed a system which meant that average workers, people on low incomes, retired in virtual poverty, to a situation now where they can retire with savings, that they've put away over the course of their life, and retire with dignity. Over time it is taking the pressure off the budget, it won't happen immediately, but yes, it is happening over time where the pressure will come off the budget. We need to look at some of the tax concessions that are perhaps going in there through the superannuation system. That is a matter which will be debated over the years ahead.
JAYES: What tax concessions would you like to look at?
JONES: There's plenty of time for us to consider those things and talk about it. To simply say that what we're going to do now is freeze future Superannuation Guarantee Levy increases, which will see us rise from 9.5 to 12 percent between 2021 and 2025, is a threat to average workers. It's a real threat to their retirement income and frankly its extraordinary from a government that spent the last nine months running around saying that if you vote for Labor your retirement incomes are going to be under threat. What is quite clear is the real threat to retirement savings from the Government backbenchers that are running this insurgency campaign.
JAYES: As you just mentioned wages growth has been static for a number of years now. Those earning under $50,000, indeed even more than that, wouldn't they rather see a pay increase now, more money in their pockets now and then deal with the superannuation system and the increase a little bit further down the track and wouldn't that be good for the economy?
JONES: When do the Superannuation Guarantee Levy increases kick in? Not this year, not next year, not even until halfway through the year after. They don't start until the year 2021 at 0.5 percent per annum over the five years from 2021. That's 2.5 percent over a five-year period. That is less than the Government is anticipating, as forecast in its budget forecast, for one single year of average wage growth increase. It is absolutely ludicrous for the Federal Government to be saying that if you freeze the Superannuation Guarantee Levy in 2021, that workers are going to get a pay increase today. It's simply not going to happen. The Government needs to go back to the drawing board and think of strategies which are going to lead to an increase in average wages today. Not wave some ridiculous carrot in front of people that says that somehow if we freeze the Superannuation Guarantee Levy of 0.5 percent in 2021, that that's going to have some sort of meaningful wage increase for workers today. It won't.
JAYES: How much should Newstart rise by?
JONES: We think that Newstart is inadequate. Prior to the last election we committed to reviewing Newstart. We're not going to commit to a headline figure today. We do think it's inadequate. The trick question for every MP is could you live on $40 a day and I can say quite frankly, no I couldn't. I struggle to see how people who are on Newstart today can do that and get themselves ready to be out there looking for a job. We're not going to commit today to a number. That needs to be done as on the basis of a careful review of all payments.
JAYES: Is it your policy to still have a review and you allow the government time to have that review as well?
JONES: That's something that we would have done if we were in government today. We will carefully look at this.
JAYES: Arent you demanding that the Government increase Newstart now?
JONES: We are demanding the Government lay out a plan that says how we're going to increase Newstart, to rebase it and to ensure that it's adequate. If the Government were even to adopt our pre-election policy to say that we should have a review that would be a good step. What they're saying, quite frankly even in the face of calls from their own backbenchers, no we're not even going to look at it, we think it's adequate today. Clearly, it's not.
JAYES: An increase of $10 a day could cost the budget $3 billion a year. Should Newstart be increased to the detriment of a surplus?
JONES: I'm not going to get into a game, I don't blame you for trying to I pin me to a number. I'm not going to get into a game today. I know its a serious question.
JAYES: It is a serious question, we havent been in surplus for 10 years and to increase Newstart would cost $10 billion a year. Labor points out that the economy and global economy isnt doing so well. This is a choice that the Government might need to make. Which is it?
JONES: It's for exactly these sorts of reasons that we suggested, that we argue quite vigorously, the Governments unfunded tax cuts, that they passed through the Parliament a few weeks ago, were a direct threat to our ability to do the things that we know we need to do over the next decade. Whether it's Newstart, whether it's reducing the a hundred and ten thousand people who are waiting on an aged care package that they've been assessed as needing, whether it's taking the pressure off the Medicare budget. We know that we've got problems coming down the line. For us to be baking in unfunded tax cuts well into the future that limit our ability to do the things we know we need to do, was not wise.